Highlights—March 12, 2016

Watching IBM:

It’s a Disgrace. By Lee Conrad. Full excerpt: March 2nd, 2016 started for many IBM workers like any other work day, except there was more than the usual tension and misgivings in the air. Some had heard the drumbeat that bad news was on the way. Rumors of job cuts after another bad quarter had made its way into the offices, to the work from home people and out in the field at a customer site. The cut in severance pay to only 1 month was certainly a bad sign. Workers who had witnessed many years of relentless job cuts hoped the axe wouldn’t swing their way. But it did.

It didn’t take long for the reports to start coming into the Watching IBM FaceBook page, formally the Alliance@IBM site. And let’s be clear, if IBM employees hadn’t posted job cut information at Watching IBM the news of this mass firing would have gone mainly unnoticed. After Watching IBM alerted the media of a job cut at IBM they came in droves to see what was going on and to report what they saw. It took IBM a long time to admit that yes, a job cut was taking place, but in its usual practice it was a sterile response devoid of any compassion for the thousands losing their jobs.

There was no compassion or apology from CEO Rometty or the Board of directors for these workers who said:

I got the RA notice on Wednesday. I’ve worked for the company for 18 years and always received 1 and 2+ on performance reviews. The same week I got the RA notice I got a Manager’s Choice Award and ACE recognition for two separate projects.

Our entire remaining US team, including our manager, are RA’d and our six jobs are being moved to Costa Rica. Lucky me, as team lead, I am now tasked with hiring and training the new team members.

One month severance pay versus the six months that I would have received in any prior RA. This is the “reward” IBM gives those of us who have had the best performance reviews and avoided prior cuts and took on all the extra work as a result of prior massive RAs.”

“I am a strategic outsourcing casualty, after 17 years of service, and a 2+ review. My manager told me that my job function will no longer be performed by a US resource. And I am to stay professional, continue working my projects and smoothly transition them to the next Global Resources project manager. I also happen to be retirement eligible but not actually ready...I am sure that though we get our minimalist one-month severance, Ginny will still get her big bonus!”

Fourteen-year employee with IBM in the U.S., 4 years with development with what is now Cloud Managed Services (CMS). I was sent an email earlier today by my manager, followed by a phone call. She said effective today I was RA’d due to continued poor performance of the entire Cloud organization, specifically the CMS unit. I was to be allowed 90 days as a remediation period, followed by a 30 day severance.”

“The layoffs are hitting GTS sales teams. I will hit my 19th anniversary with IBM on what is scheduled as my last day of employment, June 2, 2016. I am totally disgusted by the severance change that takes what should be 26 weeks at my 36 month average earnings (which means commissions are included) down to 4 weeks of my reference salary (no commissions included). And they expect me to stick around and work for 90 days to get such a pathetic “parting gift”. I have spent my entire career at IBM (I was hired straight out of college) and this is what I get for almost 2 decades of loyalty. I am still sick to my stomach at the lack of decency that this company has.”

Hundreds of similar comments were posted. Many older employees seemed to have been singled out for termination sparking a warranted concern that IBM was still practicing what many believe is age discrimination in job cuts. Numerous comments were written about losing a job and work offshored or H1b visa workers stayed. Others took the cut in severance pay to task and many expressed outrage at the bonus CEO Rometty received, the cashing in of stock options by executives and the “rewarding” of the Board of Directors for keeping a blind eye to the destruction of employee jobs and the company.

Even retirees jumped in and said it was a disgrace what was happening at IBM. But IBM wrote off retirees long ago. No raise in the pension for 15+ years and if they can get away with it IBM execs will figure out a way to get retiree pensions off the books too.

To IBM employees, retirees and ex-employees the continued destruction of the IBM US workforce, while the CEO and her blind followers in the Board of Directors enrich themselves is a disgrace.

To IBM’s morally bankrupt executives it is simply just another day at the office.

Canada has labour laws that specify a minimum of 1 week per year. The courts, however, have said that this is the very bare minimum and that there are factors that drive this higher, such as age and position which impact how quickly someone can get a comparable position.

I'm wondering if this will include many of the acquisitions IBM Watson Health purchased in the last few months. Merge Healthcare and others.

So glad I left that toxic environment when I did. They should be providing lifetime counseling.

Watching IBM:

Commentary and opinion: From One IBM Family To Another. This is a story of a special gift from one family to another. What the two families have in common, is a family member who works at IBM. One family member is the head of IBM Human Resources and the other is a casualty of IBM’s recent mass layoff.

The soon-to-be-ex-IBMer has worked at IBM for many years and thanks to the head of HR, his severance is one month of pay. That is not a typo. One month of pay. IBM’s longstanding policy of paying two weeks for every year of service was eliminated in January, presumably in anticipation of the upcoming mass layoff. Perhaps IBM realized that since they’ve taken away most of the employees’ benefits already, the options were limited as to what else to take. The ex-IBM employee qualified for the maximum of twenty-six weeks of pay prior to January.

The soon-to-be-ex-IBMer and thousands of others being fired, will retire with a lump sum payment of well, not much. Some will still get the monthly pension they were promised but if you weren’t forty years old when the change was announced, then you lost your pension to a cash balance payment. The pension was taken in 2000, and it was frozen in 2006, which meant IBM would make money investing the employees’ pension and the employees would not. The promise of medical for life was broken in 2000 along with the pension promise and there was a seventy percent reduction of employees’ variable pay. In 2014, IBM discontinued medical insurance for retirees & their spouses who were told when they retired that they would have it for life. IBM cut medical insurance assistance to the retiree spouses to $1300 per year which saves IBM millions and costs retirees’ widows thousands of dollars out of a pension that hasn’t had an adjustment for inflation in over twenty years. They really did it. They hit the retirees.

In 2014, IBM announced that employees would not receive their 401k match from IBM unless they were still employed on December 15 of that year. IBM would also not pay the 401k match into employees 401k investment account until December 31 so they could keep the employees money and invest it themselves.

Frankly, what choice did IBM have? They had to finance the IBM president’s $4.5 million bonus which is an increase from last year’s bonus of $3.6 million. What did Ginni Rometty do to deserve this bonus? She is making IBM history with 15 straight quarters of declining revenue and a drop in the stock price that is unprecedented.

IBM only made $13.2 billion in net income in 2015. They can’t possibly use any of that money to make good on promises to employees as it’s already slated it to go to executive pay, bonuses and stock options. IBM has existed for over one hundred years and was long known as one of the best companies to work for. In the last twenty years, it has become one of the worst. Somewhere along the way, the leaders of IBM opted out of integrity if you understand the meaning of integrity to be doing what you say you’ll do. Perhaps they realized they are Big Blue and there’s no one to stop them.

A story of corporate greed isn’t special. What makes this special is that it’s IBM. When Thomas Watson, Sr. ran IBM, he said IBM’s greatest asset was its’ employees. The employees often had below market salaries but they would have medical for life and a pension in return, in gratitude for their long, faithful service to IBM. Thus, the term “lifers”, became part of the IBM lingo, as most of the employees stayed for the life of their career knowing they’d be taken care of and rewarded for their loyalty.

Well it’s time to pay up and IBM is turning its’ back on those long-serving IBMers. Who would have known that one IBMer, IBM’s head of Human Resources, could destroy the livelihood of thousands in a single day? If you run into her, be sure to congratulate her on a job well done. She did it. She saved IBM millions of dollars. The employees, well, collateral damage in the war of corporate executive greed. Isn’t it ironic that you can work in “Human Resources” without having a sense of humanity?

So, from one IBM family to another, thank you for your special gift. Don’t think twice about those ex-IBMers, they’ll be alright…for a month.

Selected reader comments from the Watching IBM Facebook page follow:

They got me in 2013. In 1999 when I was outsourced to IBM I was a happy camper. Took about a year to realize how wrong I was. Glad to be gone and even more happy that due to a frugal lifestyle I was able to turn it into retirement.

Got laid off Q1 2014 and it looks like I was the lucky one - after 15 years it was a nice severance package and I'd just had a Q1 with over $1 million in sales (40% of all sales in the Southeast district - thanks to one bad ass sales executive that knew how to make it rain, shout out to Amber Close!) right at the time IBM took me from a 10% commission structure to 40% so there was some pretty hefty commission checks as well. IBM has become a poster child for all that is wrong with corporate America, not quite up to Tyco and Enron status but they're working on it.

After 36 years I finally left on my own in 2012. I found there is wonderful life outside of IBM. Imagine blue sky and bare toes in the grass as it is that nice out here out of the reach of IBM's blues. Yes, I still need income but am happily employed elsewhere. Best of luck to you all.

Glad I retired in 2001. Had a work related experience with Rometty that impacted a very good outsourced customer. It was all about raising profit for her incentive plan by cutting cost. Convinced me it was time to retire.

Fun Fact: Shortly after announcing the reduced severance pay, Diane Gherson, head of IBM Human Resources cashed in $612,110 in stock options and Ginni Rometty cashed in $6,281,724. Just another slap in the face? Laughing all the way to the bank? You betcha!

24/7 Wall Street:

IBM Board Paid Itself $4.9 Million. By Douglas A. McIntyre. Excerpts: The International Business Machine Corp. board of directors not only paid its failing CEO Ginni Rometty $19.8 million in 2015. The members paid themselves $4.9 million for the same year, which is rich for a company that is shrinking rapidly and has a share price down 11.4% over the past year and 24.7% over the past two years. Board members receive $300,000 in cash and the balance in “all other compensation.” ...

Many of the members of the board held their positions before Rometty was named chief executive officer in October 2011, so they are responsible for both her promotion and ongoing employment. Chenault (who has been blamed for damaging American Express, where he is CEO) has been on the board since 1998. Eskew has been a board member since 2005. Jackson also joined in 2005. Liveris (who has been attacked for lavish spending as CEO of Dow Chemical) has been on the board since 2010. And McNerney since 2009, Owens since 2006, Spero since 2004 and Taurel since 2001.

Several directors own no “shares of IBM common stock beneficially owned by the named person” as of the filing of the most recent proxy. Not a single one. That might lead outsiders to question their faith in the company.

I guess it takes a lot of work and effort to figure out how to cut 30,000 people from a company. Looks like they really earned this.

As did their lawyers. Earned every bit of their blood money.

IBM's board has, for many years, been loaded with members who have done little to help the stock holders by holding senior management responsible for the results of the company both in earning and company value. They have sat back idly and watched the sell off of many of the assets of the company and the loss of highly skilled employees and still paying executives and them selves big bonuses. It is sad what this company has become.

How many consecutive quarters of not making target/falling revenues and they reward themselves like this? Wow - what would they have received if the company was actually successful all that time?

Not surprised. In my long tenure, I watched IBM go from Best to Worst company to work for. It's been in a slow death spiral, ever since Gerstner.

At $70k saved with each layoff x 14000 employees and by cutting severance pay they can then take the savings and buy back stock and increase the earning per share and thereby achieve their objective and collect their bonus. Move the jobs to Poland and screw long term employees.

Pathetic what they have done to long term hard working, loyal employees. My bother got laid of last week with over 16 years. ONE month severance pay.

IEEE Spectrum:

What the IBM Layoffs Look Like. By Tekla S. Perry. Excerpts: Last Wednesday, in IBM offices around the United States, managers called in a large but as yet unknown number of employees and told them they’d just been RA’d—that’s IBM shorthand for lost their jobs as part of a “Resource Action.”

Those laid off are being told that they are welcome to apply for jobs internally; IBM officials boast of 25,000 openings, but don’t indicate whether any of those are in the United States. (The company no longer breaks down its worldwide headcount—about 378,000 at the end of 2015—by region; a fairly recent estimate suggests the U.S. headcount is about 70,000.)

Employees affected by this “Resource Action” have been posting anonymously on the Spectrum website and on others; they have also been sending reports to Watching IBM, a Facebook page organized by the remnants of the Endicott Alliance, a failed unionizing effort. A few soon-to-be-former employees have contacted me directly.

Many of those commenters are not buying the “workforce rebalancing” spin, or at least, think only a small number of the layoffs are motivated by the need to adjust the company’s skill sets. Instead, they believe the majority of the layoffs are a matter of “workforce relocating,” specifically, out of the U.S. to India, Brazil, Costa Rica, and other countries with cheaper labor costs.

I, Cringely:

What’s happening at IBM (it’s dying). By Robert X. Cringely. Excerpts: This is a column I didn’t want to write. Like many of you I am tired of IBM stories and the company that was once an industry leader has become, at best, a poster child for how not to manage the later stages of a corporate life cycle. But because what’s happening at IBM is also happening right now at hundreds of other big technology companies makes it worth covering. So let me be clear: IBM is dying.

Last week a huge round of layoffs hit IBM just as I predicted back in January. The company is releasing as few details as possible. Nobody, for example, knows exactly how big is this layoff — how many people are being let go? IEEE Spectrum found one source that said the number was 30 percent of the U.S. IBM workforce, a number which IBM says is too high. I also believe 30 percent is too high, especially if you compound it with retirements, contractors being axed, etc.

This round of IBM layoffs looks to me to be in the 20-25 percent range. A similar number of IBM workers were let go last year, but what makes this year’s numbers so notable is that most are regular employees — not contractors or retirees (those were mainly dumped last year to make those layoffs look lower). With IBM U.S. employment in the 90-100,000 range, this suggests that 18,000-25,000 people have just been shown the door at IBM. And they did so under new rules that grant at most one month of severance pay instead of up to 23 weeks that was in effect until the end of 2015. That has to be a kick in the head to all the IBM old-timers who had been waiting for the axe to fall no matter how good they were at their jobs, yet hoping for some kind of package. Well the package is here and it is full of crap. ...

Big Blue is in transition they say. Old businesses like mainframes and midrange systems are giving way to cloud, analytics, mobile, social, and security. The company has done this before many times. Gone are the card sorters and typewriters for example. The theory is that IBM will emerge like Doctor Who from this latest transformation, a new company headed for even greater things.

During such a transition time the job of the CEO is to starve the old businesses to feed the new ones. IBM CEO Ginni Rometty has done this in spades because she has the added job of keeping Wall Street happy, which means increasing dividends and share buybacks no matter the actual economics of her business. It’s all done with the idea that the new businesses will more than make up for the old.

But what if they don’t? ...

What happened? What turned Buffet around? Surely not this one layoff: IBM has been doing these for years, though never so brutally.

The only event that I can see causing this change in Warren Buffett is Ginni Rometty disclosing to her largest shareholder that the basic premise of transition and renewal isn’t working. Things aren't going well at all in cloud, analytics, mobile, social and security land. When those kick in (if they kick-in) IBM will be just one company in a crowd with no particular advantage over the others.

IBM used to be able to count on its size, its people, its loyal customers, but all of those are going or gone. Apple or Google could buy IBM with cash on hand, so it’s no longer the Big Kahuna. IBMers of yore are all gone and for the current breed it’s just another job. IBM customers are leaving in droves, too. Of the whole CAMSS suite only security is an obvious success and the world isn’t ready for a $100 billion security company.

Selected reader comments follow:

IMHO the main problem at IBM is the lack of a strategy. Ginny’s stated strategy of “Social, Mobile and Analytics (plus cloud)” is like McDonalds saying their strategy is “hamburgers and drinks”. That’s not a strategy; those are fundamental technologies that support almost every technology company out there. IBM seems to be making progress in their security story, but it’s like expecting lifeboats from preventing the titanic to sink.

The thing that upsets me about this are the enormous salaries and benefits that have been continually extracted, by the executives, from the company, throughout its obvious and inevitable death spiral, as though they were actually doing their jobs well. Maybe, in a sense, they even were, but to stick it to the people on whose back the company functioned (like reducing their severance, as reported), while rolling in cash like it were a successful enterprise, is what makes even people like me fancy the things that Bernie Sanders and the Occupy Wall Street crowd have been saying about inequality. I went to Google what the CEO’s salary was, and, bingo: the LA Times nailed it back at the end of January. http://www.latimes.com/business/hiltzik/la-fi-mh-ibm-s-ceo-writes-a-new-chapter-20160129-column.html

I am in an area of IBM that wasn’t hit by the recent RA. However, even as a 2+ performer, my GDP bonus for 2015 didn’t even total 1% of my salary (.00885% for a job well done). Guess I should be happy for any crumb tossed my way, but when my CEO readily takes millions for her continued under-performance, my desire to give a #%!* goes right out the window.

IBM’s fall began with the board of director’s 1992 decision to bring in the first “outsider” to run the company, Lou Gerstner. Gerstner, a takeover “specialist” and McKinsey management consultant with zero personal knowledge of the computer industry, quickly came up with the right solution for the wrong company. His appointment was accompanied by tremendous positive press and his decisions regarding “fixing” IBM were taken as infallible. He was really IBM’s Donald Trump (without the smarmy profanity). Unfortunately he was profoundly wrong in his assessment of what ailed IBM and hence his solution. Poor Ginny Rometty was given a fatally flawed organization that had been kept afloat by slowly dying inertia.

“Poor Ginni Rometty” has made a mint while steering IBM further and deeper into the ditch. No need to feel sorry for her.

There are a couple books on the Gerstner era of IBM. Having worked at IBM at the time I can tell you most of the information in those books is true. Gerstner DID bring IBM back to fiscal health. One of the first things he did was to reach out and have one-on-one executive meetings with all of IBM’s big and important customers. It was called “operation bear hug.” As customers voiced issues the IBM exec’s were empowered to make things right. It worked. It repaired IBM’s relationship with is customers. It bought IBM time to fix its business and realign it to the market needs.

Gerstner didn’t need to know anything about TECH or the computer industry. We we all fail to remember is what make a company work — customers. Customers buy a company’s products and services, not Wall Street. Customers provide the cash that becomes a company’s revenue, income, dividends, etc; not Wall Street. Without customers IBM would cease to exist. Gerstner knew that, he fixed that.

What Gerstner didn’t fix was the organization culture that got IBM into trouble in the first place. IBM is actually a poorly managed company and its culture does not promote the best leaders. Its culture does not allow good leaders to operate. That culture produced Sam P. and Ginni.

Early in Sam P’s reign we had a financial crisis, stock market crash, and deep recession. IBM did better than most companies during that time, primarily on the strength of its multi-year contracts. They buffered IBM from the worst effects of the economic crisis. As stock prices plunged and interest rates dropped to zero, big investors looked for places to invest their money, safe investments. IBM was one of those. A lot of money flocked to IBM — simply because it was “safe.” Sam misinterpreted that as being a reflection on his leadership. Sam, like most of IBM’s leadership was a sales person. Sam started selling IBM to Wall Street. The EPS goals, the cost cuttings, the layoffs, the benefits cuts all that stuff was to make IBM even more attractive in the eyes of Wall Street. For a time this plan worked. IBM’s stock price soared and Wall Street was very happy.

What was not apparent at the time was IBM was also cheating its customers and damaging its relationship with them. It is not that IBM’s CAMSS strategy is good or gutting services is bad, it is the damage IBM is doing with its customers that is important. Without customers the best business strategy in the world is useless.

Gerstner, not a tech guy, brought IBM’s customers back. Sam P, not a tech guy drove IBM’s customers away. Ginni, perhaps IBM’s most tech savvy CEO ever is hoping the new businesses take flight before it is too late. IBM’s traditional businesses are now too damaged to be saved. This is a very dangerous time and it started when IBM forgot where its money comes from.

John, nice insight about driving customers away. As I mention below, I left IBM after enough of the madness and landed at a once true blue IBM client shop. By the time I got here, the IBM equipment was/is being systematically dismantled at every opportunity. Difficult in some areas, particularly the mainframe, but nothing new is going on that platform. On the contrary, I project the last mainframe application will migrate to the VM farm (or a cloud provider) within 3-5 years. AWS is a popular alternative here.

And the VM farm, it used to be IBM x-blades, but since big blue decided to dump that area of the business to Lenovo, it’s now being migrated to Dell as fast as possible. You can’t make this stuff up.

The basic overtone here is that IBM no longer listens to clients and provides terrible service, particularly when you call for support and connect to offshore kids reading from a script who you can barely understand.

At this shop, it’s fair to say the damage is done and strategic direction is not in IBM’s favor. Watching the YoY earnings declines convinces me there must be many other shops out there just like this one.

Gerstner’s book finished with some loyal statements, and then a curious postscript stating that, after having been gone a little while, he realised he had always been an outsider. Maybe there was a limit to the cultural change he could drive. I was there for his whole tenure, and thought that in that aspect, at least, he did well.

Steve Jobs spoke about companies that end up with sales guys in positions of power over product development guys, because an increase in sales can yield greater bottom line improvements, short term at least. I imagine he might have had his own experiences at Apple in mind, but those words sum up IBM in my opinion.

Ginny may be very tech savvy, but in key areas IBM invested too little too late, and fell behind. Some of those decisions were on her watch. Microsoft is transforming rapidly and effectively post Balmer. Why couldn’t IBM do the same post Palmisano?

Having worked for other once large and now defunct software companies, there are similar patterns of behavior. These include:

Increasing layers of management and executives, to the point where each person who actually does real work seems to have their own management chain.

Confusing sales with revenue – this is really a lack of knowledge about where the operating income actually comes from and how to continue to support those critical revenue streams while developing new and useful products.

Disrespect for the rank and file – the people who represent the company to the customers and develop the products. A belief that technical expertise is a commodity, not a skill.

Disrespect for the very customers who fund the company. Primarily those paying service and support where the highest margins are. This is often a by-product of #3, and includes not having enough qualified staff to assist when things are not going well.

Reduction in benefits, and multi-tier benefit systems. The managers and execs may have different and better offerings to choose from, the basics for the coders and creators. An example I saw at a prior employer was that to support the country club memberships for three execs a team of seven working on enhancements to a product line that was generating substantial revenue in service and support (far, far over the cost ) were let go, because as everyone know all business is really done on a golf course.

Constant layoffs – called by increasingly strange names. Right sizing, lean work place (how can that be with the ratio of execs to worker bees approaching 1?), agile…whatever it was called, it typically meant more work with less help and often no support

A steady erosion in redundancy payouts.

Buying companies in place of development and R&D. Not recognizing innovation from within.

Following fashion rather than hard work and clear thinking. This manifests in increasingly meaningless and buzzword laden meetings and (pardon the expression) communications that do nothing except cause cycles of knee jerk reactions as first and second line managers tried to interpret buzzwords as strategy, mimicking the executive confusion, and direct their teams towards those empty and changeable goals.

Recognition of glad-handing over hard work in the technical roles. Former employees often become decision makers and/or Influencers fairly quickly elsewhere – that accelerates the decline when they have been treated with contempt.

IBM is a big ship, and still can turn itself around. I believed that was true; that it would be recognized that partnerships with customers, that care for their success and pride in quality, would somehow come back into fashion within IBM management.

And while my group has not yet been touched by the latest round of layoffs, we have been hurt in the past and have the group reaction of flinching when we hear of new ones. And I daresay that if, or rather when, IBM elects to let us go customers will notice our absence and be far more alarmed than if all the top 4 layers of IBM execs and managers were to vanish is a puff of burnt-money smoke. And letting go that many highly skilled and formerly motivated people will not save enough money to pay the bonus of a single top level executive. A pity. I mourn, mostly for what might have been and what may perhaps still be if sense, sensibility, and sensitivity return.

GBS Drone: We are hiring web designers and design thinkers by the tanker load. It’s all to try to get clients to come in and then sell them Watson. Clients aren’t interested. My client said if I dare mention Watson I will be turfed out of meetings. The news from the top this is a sales failure. We have nothing clients want except a rag tag bag of expensive and second class (at best) pile of crap software.

Design thinking is not going to help. The good people are gone replaced with grads and people who have drunk the Kool-Aid. The shiny SCAMS is just brightly colored furniture, post it notes and smiley simpletons.

Times are so desperate I got an email to Tweet about IBM about how fun and ‘Google like’ it is to work there. It’s hell. There are not enough projects for the people they are hiring so they get put on pips and shoved out onto projects not related to their expertise. They are ruining people’s lives.

Everyone is miserable. At least we had packages to look forward to and now we don’t have that.

It’s not dated older workers with outdated skills they just shed.

Here’s a great GBS scam. Hire some one with gravitas and hot skills. Send them out front and center to show IBM has hot skills and is doing cool stuff. Use them to close deals. Give them a few days to input into the project and then yank them off for a grad or offshore it. This way the profit margin is higher and the work can be sold competitively. The books for the project look awesome. Bait and switch. Repeat. When the hot skills person gets on a PIP for not hitting utilization targets let them take the blame, sack them and get another one.

Scam 2: To protect yourself against utilization targets charge people hours for case studies, slides and any old sales collateral. Bank time against codes to protect your team while screwing everyone else. The managers that have been around awhile are masters of this.

I hate this company.

Misty:GBS drone, well said. Many clients are not interested in the SCAMS angle IBM is pushing because not only is much of it substandard wishware, in many cases some of the client’s decision making employees are former IBMers who either quit or were RA’d and therefore know exactly what is behind IBM door #2. They will steer their new employer away from IBM solutions at every possible turn. IBM has effectively seeded their demise all across the IT landscape.

A case in point. After watching the place slowly implode for over two decades, after watching ruthless corporate politician execs continually padding their pockets on the backs of the rank and file workers, I pulled a disappearing act and landed at a great place where they actually refer to their employees as ‘people.’ There were several other former IBMers, a few who were RA victims, also on staff at this new employer. Many of us were in positions to advise on hardware/software strategy and procurement.

When the IBM sales cartel would show up, we would find ourselves snickering under the table at their pitch. On one occasion, they proposed we switch from an industry standard product to one of their inferior alternatives by saying ‘but that vendor has moved most of the development (of that product) to India.’ We fell into disbelief that the person would even try that angle and proceeded to remind him of his employer’s offshoring track record. With that, the meeting ended.

Cringely and others are right, IBM is done, cooked, finished. Maybe that is why the leadership ranks are extracting wealth for themselves at a rapid clip, they know the end is near. It will simply take time for the carcass to grow cold and finally turn to dust. And all the while, up to the inevitable end, the CFO and Ginni will continue to spew forth the tag line ‘we are continuing our transition to higher value…’ Yawn.

El Niño: It’s not just old-line IBM that’s dying. Even the recent big data and cloud acquisitions are suffering. For example, Weather Underground has gotten noticeably worse since IBM bought them. Their website has become unreliable, their email alerts never get sent, and their apps often don’t update. Deafening silence when one tries to contact customer support. I probably won’t renew my subscription.

Cooked_Goose: Cringely is right on — IBM is dying. I no longer see a path to save it. In my opinion the CEO has smashed too many things while stripping it for loot for the patient to have any hope of recovery. Her game now is to keep the spin going as long as possible to collect another $20M annual payout. Supposedly Watson and Cloud will save it. Just say that with a straight face for one more year, get fools in the market to believe it, and collect another $20M payout. Cloud is a low margin commodity business that IBM is, what, fourth in?

And Watson is a desperate game of spin. Watson looks to me like a boondoggle. IBM is giving prizes to employees who create Watson apps. They are desperate for Watson users. No details of Watson revenues are ever released. Watson is AI and AI has been touted as poised for a huge breakthrough … any moment now … since the 1950s. Putting all your chips on Cloud and Watson smells like even the spinmeister herself is running out of ideas of things she can still keep spinning.

The current CEO has caused a lot of damage. Inside the company its very visible. Couple of examples:

Frequent reorgs results in sales teams being shuffled. There are many products which piggyback on other IBM hardware software. Previously all these related products were in the same org and sales teams collaborated since both their targets were linked. With reorgs this entire dynamic was affected and in the product line I worked revenue fell by around 500milion just because of this thoughtless reorg

Bleeding successful product lines dry and not investing in them. The logic is that they are mature and don’t need more investment. However the job cuts that follow this and subsequent attrition has gutted the teams of talent.

Skewed management to worker ratio. When top management asks to reduce the managers they are made individual contributors and then an existing IC who is productive is fired. The manager who became IC is given title of lead and continues to must do tracking. The remaining ICs need to pickup the work done by the fired IC. Many of the middle management should be cut.

The CEO is clueless and follows a strategy that is now adopted by most of management. Keep coming up with new fads do quick prototyping on what’s the latest coolest tech and come up with something that is then showcased. It is then thrown to dustbin as it’s creators know it’s a gimmick.

Mobile Man: I jumped ship after the job I was promised failed to exist. I joined to what I thought would be an exciting and teaming mobile practice where I could be on the inventor program doing cutting edge stuff for clients. I ended up doing endless PowerPoint decks for sales teams. Mobile 101. Did do one crappy service app and spent a year just swapping the logo over so it could be sold to different clients. I say crappy because it was rough and the kind of thing that you do in a week. They were trying to find buyers at $200k a throw. All the work was given to grads or went to Eastern Europe while we were just touted out at workshops.

When the big mobile conference came around and I was expecting to go as a leader and speaker in this space I found myself pushed out by the strategy/sales guy, department head and a grad.

There was no work. None. I’d pass people in the halls and no one was working on anything except sales. I was worried my skills would start to slide if I didn’t get back to doing real mobile work. Only training course I did was IBMs design thinking course which is about as practical as a box of frogs, so I left and joined a start up. Hate to say it but I have met more honest fraudsters.

Seeking Alpha:

All Is Lost At IBM. By Dana Blankenhorn. Excerpts: IBM Corp.] used to be among America's best employers. Growing up on Long Island, many of my neighbors were IBM'ers, and they loved the company. Their love was reciprocated. Those days are over.

In its latest round of layoffs, IBM is giving long-time employees just one month's severance pay. Over the previous year, it had hired about 70,000 and cut 70,000, meaning nearly one in five employees were either going in or out the door during the year.

Estimates on the size of the latest layoffs vary, but some say it may add up to one-third of the U.S. workforce. The Register reported that by the end of 2017, 80% of its services business will be located offshore. The difference between IBM Services and an Indian outsourcing company like Wipro are diminishing by the day. The layoffs were big enough that Salesforce.com CEO Marc Benioff actually tweeted about it, inviting resumes.

IBM bulls may note that the company is pruning deadwood, and that it's avoiding higher payouts for pensions that are already hurting the balance sheet. But good technology companies don't treat people as disposable parts. ...

Could IBM be bought? At its valuation of $132 billion, the largest U.S. tech employers, like Googleand Apple, could easily buy the company for cash. But if they were interested, it would be for the employees - older programmers, many of them in obsolete areas. Tech is a young person's game. Such an acquisition would be silly.

Could IBM make a comeback? The only way I could see this would be by literally throwing a Hail Mary, buying a company like American Express for its transaction processing niche, moving more strongly into government work by combining with Honeywell, or even picking up CSRA from Providence Equity Partners and focusing on government work. ...

All I can say, in the strongest possible terms, is this. Avoid IBM at any price.

Selected reader comments follow:]

Thank god with all those lay offs and falling stock prices the Board was able to find money to give a raise the CEO and other managers.

They are entitled. Their outstanding bravery must be rewarded.

IBM is laying off people that make $$$. So to say they are laying off because of the move in business area is stupid. They are keeping people that are H1b visas doing the same job as the person who is making $90K. So what IBM is doing is screwing its employees.

They don't care about employees anymore because they can just go to the Middle East and get someone that knows hardly anything pay for there education and then have them fill a position for a customer.

IBM's customers are the ones that will pay the price for this. They have lost several big contracts due to the fact that H1b visas don't know what they say they know.

IBM will have a hard time surviving with their current CEO as she is a joke. Look at HP and Yahoo; they have fallen because of the same problem. IBM needs to think twice about what they are doing to their employees because it is the employees that make the company money not the managers or the execs.

I think it is funny the execs can take a bonus yet they were told not to give GDP to 2's on the PBC rating thus saving money. IBM is dying and it will continue to die because the execs are behind on what the world is doing.

IBM has been going through a so called "transition" for years. The only thing they appear to be good at is transitioning jobs overseas and abuse of H1b visa's. Historically, IBM has always been late to market over the past decade. At present, it's no different except now they no longer attract the best talent. Ginny hung on to their road-map to 2015 which internals had called "Roadkill to 2015" strategy for years. (even after awareness it was a failed strategy).

The future sandbox areas of the market where IBM wants to now transition to and play is already crowded and future profit margins (if any) are slim to none for a ship the size of IBM. Data, cloud, and systems of engagement.

These three areas alone cannot support the future growth of a ship the size of IBM. Once again they are late to market trying to right their now big pale blue ship.

The IBM ship of today is rudderless, and their captain at the helm is inept. However, with very little future organic growth on the horizon they will continue to limp along acquiring "bolt on" companies as they drift and flounder ever nearer the rocky shoreline of irrelevant.

Buy it for the dividend or better yet don't bother at all,

One of the very worst management teams in corporate America. Over the past 3 years, they presided over a 33% decline in the stock price while the S&P 500 rose 27%. It is a tragedy that this former icon has become a massive value trap.

The core message is that good companies don't treat their employees as disposable. IBM used to be a good company. I know I won't be applying for a job at IBM any time soon. Because why would I? There are many many better companies to work for.

One month severance for a company that generates billions in free cash flow is p!ss poor no matter how you slice it.

IBM is giving the statutory minimum.

Imagine you're in your late 50s, you've worked for this company since college, hung with them through the hard times, defended them. And then they give you this. I wonder what morale is like in IBM offices today.

I remember a time when layoffs of highly experienced people included a week's pay for each year of service. That used to be the case at IBM. Do you really think people at IBM are happy about these new conditions?

In Ireland you typically get 5 weeks salary per year of service plus statutory redundancy. If the redundancy is flawed you will get significantly more at an employment tribunal.

Frankly, if I'd been there a long time, I would prefer to have a week's severance for every year of service so that I could dedicate my time looking for new opportunities rather than spending 90 more days at a company that didn't want me. And the idea that layoffs have any kind of negative connotation in today's workplace is complete and utter BS.

Condition of the month severance is to continue working and training your replacements, whether H1b or offshore during those 90 days. Don't expect managers to give folks much time to job hunt.

"And the idea that layoffs have any kind of negative connotation in today's workplace is complete and utter BS." As someone who has hired a lot of people at IBM and elsewhere, I would disagree with that.

Perhaps I was not clear when I said "division". I know a highly ranked IBMer who works for GBS and has standing offers from three other areas in GBS to move over if they tire of their current job. After the last round of RAs, they spoke with management and it was confirmed that anyone RAd from GBS may not take another position within GBS, regardless of the interest expressed.

I'm certain that attitude will cost them some highly skilled workers along with the so-called deadwood.

@Mark_A, clearly you are not working for a high tech company. Staying for 90 days actually is an insult to employees. Many high tech companies would pay you 90 days not to come into the offices because they want to move on without any concerns for you to do anything negative. IBM had pretty good early retirement packages before. Do they still have them? By the way, this article is about investment in IBM. If you think we should, please provide your opinions and supporting data.

Low employee morale started when they terminated their pension plan years ago. This story is somewhat reminiscent of HP. Great company ruined by B School mentality.

I worked as a systems engineer with mostly IBM products retiring in 2012. Big problem is too little investment in product; too big buybacks and management overhead.

Mark_A You have no idea what you are talking about. The employees still have to perform on their job for 90 days and many will have to train their replacements. If they do happen to find a job outside of IBM before the 90 days, they lose the 1 month pay if they leave early. That is clearly not the same as the 2 weeks pay per year of service after a 30 day notice period.

If you understood how the layoff process in IBM works, you would never suggest they can find another job in IBM. HR and/or Operations blocks literally every transfer to another organization. Cost cutting doesn't work if you just move the cost, and that's what these are all about.

If you look at where IBMs current revenues are coming from, and their products pipeline, you'll agree with Dana.

IBM has basically been making a living in the last decade by transferring American technology, IP, & Management know how to emerging markets (specifically China.)

Now that the knowledge transfer is done, the Chinese are doing what IBM did, and undercutting pricing.

A top down culture driven by accounting and financial engineering has long eroded IBM. At some point, it became difficult to initiate and promote bottom up innovation. Not only in engineering, but from sales and marketing personnel.

Strict accounting and processes resulted in masses of people being pigeonholed into niche areas. Skills and even work habits degraded. Suffice it to say, especially in services, IBM did not foster a culture of self learning and adaptation...in a day and age of open source products that demand this.

So you're seeing a labor tragedy of sorts as IBM tries to turn itself around. Will it? I'm not sure. Not if Ginni and company remain in charge. No doubt, IBM still has world class engineers...but they're moving on...with no sign that the opposite is occurring in any significance.

Until this settles, I wouldn't buy. I'm holding my shares...just because. In defiance of rationality. I hold hope that an iconic American machines company will endure this and stay around for another 100 years...although, like I said, I'm not feeling it.

Author’s reply » Once upon a time IBM was by far the highest cap tech company. Now they're #8. Cisco just passed 'em. http://bit.ly/1L9s8r2. How fast they're dying I can't say. But they're dying.

"No doubt, IBM still has world class engineers" They have some world class engineers, but not nearly as many as you think.

This company is circling the drain. It will end up about 1/2 it's current size and a 'me too' player. SW will continue to spin off cash but less and less as it gets dis-intermediated. Given the offshore employee profile it is at risk of geopolitical and foreign protectionist and labor market interference.

The company is chock full of VP's and Directors who add little value as they re-swizzle PPT's and worksheets and extract high salaries.

Sales incentives are reduced each year for an increasingly frustrated client facing population. Client satisfaction is dropping along with that of employees.

Buffet blew it. He was probably sold a bill of goods by Ginni. Love to see that PPT. Dairy Queen and See's Candies are more up his alley.

The dividend is intact for now but eventually will come under pressure as cash flow declines. They are addicted to acquisitions needing to do more and more as the prior ones chew up their tax benefits and their revenue moves into the base. It's a vicious 2 year cycle. Buy-take accounting benefits-fire talent-move on to the next one. After all those acquisitions where is the organic growth?. Nowhere. The board just rolls over and accepts all this. Shameful.

Nothing differentiates this company. After 7 years WATSON is still a toy being leapt over by the market.

Author’s reply » I have, in the past, been positive about IBM. I praised them very recently. I will continue to write positive stories when there is positive news.

But the company has long been poisoned at the top. Top tech management should not come from marketing. When the entrepreneur dies, a product vision needs to replace it.

Consider Microsoft. They put Steve Ballmer, marketing guy, in charge and drifted for a decade. Then they put a product guy, Nadella in. Now they're cooking again.

It's not personal. But that's the way tech works. I've been covering this stuff since 1982 and it's not a mystery. IBM itself nearly killed itself by bringing in marketing guys like Akers who became vulnerable to the first kid with a Clue who came along and understood the product environment. Fellow named Gates.

Now, after Gerstner got them back on their feet, they do it again with Palmisano, then Rometty?

Those who ignore their own corporate history don't deserve a third chance.

Pruning deadwood? You *must* be kidding me. We pruned any deadwood many layoffs ago. Sure, at the beginning, there was some fat. There are always some players who are not pulling their weight, and they are the first ones off the boat. But now? Now IBM is continuing to sell and "support" legacy business, while cutting way too many of the people who would have been doing that work. leaving exhausted skeleton teams behind.

One post I read summed it up admirably... wishing good luck to those caught in this RA, *and* to those left behind trying to accomplish the impossible.

Just recently laid off in March 5 job action. I was not surprised and am happy to go since it looks like IBM is in permanent decline. It is true that no one is irreplaceable but IBM seems to think everyone is replaceable at the same time.

IBM business, service and employer/employee models are all broken.

The business model puts the investors first, the customers second and the employees third.

The service model fails due to the constant and never ending layoffs and offshoring. This has seriously impacted IBM's ability to provide good service. It would be very difficult to support even some of IBM's more complex offerings using the service model in place.

Employer/employee Models: There is no longer mutual respect between IBM and employees nor are the goals of each group aligned. It is clear that what is good for IBM's leadership is really not good for the employees. Morale is low and employees neither believe nor trust IBM. It seems that IBM does not really value employees and relies mainly on negative reinforcement to motivate workers. IBM management structure is ineffectual and wastes everyone's time by coming up with meretricious tasks for the employees.

IBM's future is behind it. I advise everyone who is still employed there to get out if they can.

IBM is responsible for offshoring more US, Canada, and EU jobs than any other company, and lying about it for 15 years. Disgraceful. Meanwhile they continue to buy innovative young companies, only to destroy them too. The world would be better off without this company around.

Fear not IBM fan boys and girls, there is still much DEADWOOD to be chopped from the great oak that is ibm. As an example, several years ago a Dr. Ric Bradshaw was RA'd from the Tucson site after many, many years of service.

He didn't do much really, except be the primary member of a team which recovered the data from the Challenger shuttle flight recorder tapes which had sat on the ocean floor for 3 months http://bit.ly/1phI4Ch. He's definitely the kind of DEADWOOD IBM needs to continue cutting in order to survive the next 100 years because as everyone knows, nobody in this world uses magnetic tape anymore for backups.

Everyone also knows PhDs cannot continue learning in other areas, so he'd be completely useless in any other part of IBM's business in today's security, cloud, analytics, mobile, and social (SCAMS).

Revel in your dividends today, because while IBM continues to get rid of/chase away/dispose of its assets (i.e., people), there will eventually be nothing left to generate them as it circles the drain to irrelevance.

I know the workings of IBM through directly working with them on a several projects and through people who have also worked with them. They are a total disaster in terms of consulting and in their acquisition of technologies. Here is how they work:

Acquire a technology that has a substantial user base

Be fully self serving - use customers who are engaged with IBM as consultants or technology partners to push the technologies they acquired, REGARDLESS if the technology is what the customer needs. This is non-organic growth and short lived as the users of the technology (existing and new) dump it as it never produces the outcome promised.

Have extremely high consultancy rates with extremely incompetent "consultants"

Lie, lie and lie about their technology, competence and skill sets.

IBM is run by incompetent leaders that have just keep making things worse. I agree IBM should be avoided, in all aspects, given that IBM technologies are outdated, their business model is outdated and no technology expert worth their salt thinks of IBM these days when architecting solutions. I am waiting to see if Watson makes an impact.

Everyone keeps trotting out Watson as the savior of IBM. There is a large division within IBM dedicated to Watson. That division's initiatives have gone essentially nowhere, and other competitors in the AI space are gaining rapidly. IBM managed to squander its lead in AI. If current trends continue, it will be an also-ran in that space as well.

The Register:

Eight in ten IBM Global Tech Services roles will be offshore by 2017. It says so on the Global Resourcing Blueprint. By Paul Kunert. Excerpts: Just 20 per cent of IBM’s Global Technology Services workforce in mature economies could remain under offshoring and near-shoring plans set out by the company’s top brass, The Register can exclusively reveal.

Big Blue last month embarked on a cost-cutting exercise in the UK, putting 1,352 staff on a 45-day notice period to “drive an aggressive agenda to transform its operational model to maintain our competitive advantage”. ...

In a confidential document drawn up by IBM and the ECC, Big Blue said 63 per cent of UK work is completed by employees in offshore locations. The IT giant said it was “targeting Skills For Value initiatives to achieve Global Resourcing ratio of 68 per cent by the end of 2016”.

“This is well short of the Global Blueprint ratio of 24/76 by the end of 2016 and 20/80 by the end of 2017,” the document stated.

Selected reader comments follow:

Hmm. No doubt this has to do with a laser focus on Client Excellence.

"It is hard to be agile when most of the coders are based in another time zone" I vote that for the Best Statement of the Week Award!

Re: "it is hard to be agile when most of the coders are based in another time zone".

Yes, I used to have to contend with this, ask an email question of the devs, get a crappy half answer the next day. You follow it up with clarifications and extra questions, get an answer the day after that may, if you're lucky, have what you need in it.

And so on, it can take up to a week, with much prompting, to get an answer to a question that should take 5 minutes.

Trainwreck. I've worked in GTS for a few years. I've worked with countless offshore DBAs and techies from other areas. There are a few good ones offshore but a bit like good project managers, good ones are bloody hard to find.

Especially if IBM were to honour my redundancy package I would be pleased to go. IBM has always been a tough place to work. But IBM has lost its integrity with respect to staff and customers. You see this on a daily basis in management comms with customers when you know the truth and what is really happening. You see it again with they way they managed pensions and in general how they treat the staff. The "Business Conduct Guidelines" only apply to those at the bottom. Management can do as they please. And they do.

They're always looking achieving the Q's targets. "I don't care about the implications for the next year or next Q. I know that if I don't hit this Q's targets I won't be around to worry about the next Q or next year". Hence everything is short sighted.

It can't continue, it won't continue. The funny thing is, the concept of outsourcing and the profits coming from automation, economies of scale etc. is a wonderful idea. But you've got to wonder why none of it is implemented...ah...yes...because it's too expensive!

Of course at the top of the costs is staff. All they see is the cost. So we're the first to go. And those that stay have to cope with the aftermath. It will be interesting this time as staff who are go are going with statutory minimum payments, and are expected to work the notice period. The internal security of systems is generally poor. So we have motive, opportunity and method. Sounds like a disaster waiting to happen.

InformationWeek:

IBM Denies Layoff Size As Salesforce CEO Woos Talent. IBM called reports that it is laying off a third of its workforce "outlandish and untrue." That's not stopping Salesforce CEO Marc Benioff from publicly inviting IBM employees to apply for open posts at his firm. By Jessica Davis. Excerpts: Responding to reports that IBM is laying off up to a third of its US workforce, an executive at the company has reached out to InformationWeek to deny those claims.

"The notion that IBM is laying off a third of its workforce, in the US or anywhere else, is completely outlandish and untrue," said IBM communications VP Ian Colley in an email to InformationWeek. While denying that cuts are hitting a third of the workforce, Colley declined to provide actual headcount numbers in relation to this wave of job cuts.

That's not a surprise. In recent years IBM has declined to reveal any actual headcount numbers in layoffs. ...

Meanwhile, over the weekend, Salesforce CEO Marc Benioff reached out to IBM employees in several tweets, inviting them to send him their resumes.

"No one I know realized just how bad things are @IBM. I hope they will be more open to partnerships now," Benioff tweeted. He provided the email address ceo@salesforce.com for laid-off IBM employees to use when sending their resumes to Salesforce. ...

In an email exchange with InformationWeek, IBM's Colley highlighted IBM's hiring efforts for the 25,000 positions he said are open at IBM. Colley noted in his email that "a significant number of them are in the US," but declined to provide a percentage or actual number of US-based job openings. ...

Colley said via email that IBM also now employs several thousand healthcare specialists, and is working to attract Millennials, medical doctors, anthropologists, and new kinds of data scientists as employees.

Early reports had said that a third of IBM's workforce was at risk for cuts, a number that IBM has since called "completely outlandish and untrue." IBM declined to provide an actual number of jobs targeted for cuts, but noted that the company hired 70,000 people in 2015 and currently has 25,000 open positions around the world, including in the US.

Now, Bernstein analyst A.M. (Toni) Sacconaghi has released an estimate that IBM's job cuts could total more than 14,000 in the first quarter. He shared the job cut estimate number in a report sent to Bernstein clients and members of the press on March 8.

How did Bernstein and Sacconaghi arrive at the 14,000 number? Sacconaghi noted in his report that IBM has historically matched big one-time gains (such as asset sales) with workforce cuts. The gain is used to offset one-time costs related to the job cuts. ...

To arrive at the headcount job cut estimate, Bernstein took IBM's historical cost to cut one employee -- $70,000 -- and evaluated it based on a $1 billion gain that IBM has realized in conjunction with a settlement with the Japanese Tax Authority. The settlement was reported in the company's 10-K report, filed February 23. Bernstein noted that IBM's guidance for 2016 already includes the $1 billion Japanese Tax Authority settlement. ...

"Given various reports that IBM is providing much lower severance in this rebalancing (1 month vs. up to 6 months based on tenure historically), it is possible that the workforce reduction number could be materially higher than this estimate," Sacconaghi wrote in the report. ...

The Bernstein report said IBM can achieve an annual savings of $1 billion in operating costs through this "workforce rebalancing," noting that according to Bernstein's estimate IBM "captures about 50% of the gross savings to its bottom line, as the company typically rehires employees in offshore locations." ...

"While historically, IBM's workforce savings correlated strongly with improving margins, this has not been the case for the company over the last two years, where despite very large cost savings hitting its income statement, IBM's operating margins have contracted meaningfully," he wrote. "Accordingly, investors should be careful in assuming that IBM's incremental restructuring savings will necessarily translate into margin improvement."

Selected reader comments from the Watching IBM Facebook page follow:

This methodology in the news item essentially divides $1 billion by an estimated cost of $70,000 to reduce an employee. Let's assume $20,000 to reduce an employee and the 14,000 number for cuts becomes 49,000. With the one month severance pay new policy, I think $20,000 is generous as an assumption

Do bitter ex-employees that go on to other customers/clients/peer companies cost any money over time in lost sales/revenue/brand tarnish?

IBM is beyond the point where it can cost-cut its way to prosperity. All of these cuts are affecting top line earnings potential. That's kind of where Kodak was several years back and we all know how that turned out.

Business Cloud News (BCN):

Fresh redundancies illustrate IBM’s continuing cloud challenge. By Jamie Davies. Within the last twelve months, the company has inducted more than 70,000 IBMers and spent more on acquisitions than in any other 12-month period in its history. Focusing on data analytics, security, machine learning and mobile, the business is attracting a new breed of employee to its ranks. All would seem well until you consult social media.

The Facebook group, Watching IBM, has increased its following by more than 66% over the last week. The group has taken responsibility for bringing light to the 70,000 job losses experienced by the firm in the past few months. Comments such as “At the beginning of 2015 our department had 25 people in it. At the beginning of 2016 our department has 13 in it,” highlight the decline. ...

With company revenues declining for fifteen consecutive quarters, this should not come as a great surprise for most; IBM’s struggles to re-invent itself as a cloud business have been well documented over recent years. ...

Back in January, Clive Longbottom, Service Director at Quocirca commented that IBM could risk being left behind, should the transition take too long. With AWS, Microsoft and Google continuing to surge forward, that risk is continuing to grow, though the consultancy skills nurtured in IBM will remain in demand “I still believe that IBM will remain a major force in the IT world, it just has to make sure it positions and messages itself effectively to its existing customers and to its prospects”

Watching IBM: More than 50% of laid-off IBMers think that age discrimination was a factor. Do you? If it happened to you, tell us! Take the survey at www.surveymonkey.com/r/YTGCSLT

"No respect for their employees"

Current Employee — IT Specialist in London, England (UK). I have been working at IBM full-time (more than 10 years). Pros: Colleagues are good. Work is interesting. Everyone in delivery teams do a good job and help each other. You get to work with interesting clients. Cons: Management above delivery teams have no idea who we are and what we do. No respect or loyalty shown by company to its employees. Always at risk of being made redundant. Redundancy package is as little as is legally allowed. Bonuses are derisory. You are expected to work extra hours for free and it counts against you in reviews if you don't. Advice to Management: If you want loyal, respectful employees then show some respect and loyalty in return.

"Terrible Company to Work For"

Former Employee — Sales Engineer in Herndon, VA. I worked at IBM full-time (more than 3 years).

Pros: There may still be some cachet to having IBM on your résumé just for old time's sake. There are some very smart and wonderful people still lingering at IBM.

Cons: IBM has become a disastrous place to work. If you are not "born IBM" as a college intern or are a legacy of IBMer parents, you will NEVER be True Blue in the eyes of the Brahman who run IBM and your head will always be first on the chopping block, no matter what your performance is.

Your head will spin at the number of barnacles who have been with IBM for 20, 30, or more years, many of whom have never worked for another company. On the management side, this leads to an old boy network constantly looking out for itself (I mean that in a non-gender-specific way — there are many girls in the old boy network and they're every bit as useless). On the worker bee side, there are lots of good people who have put up with the constant drip, drip, drip of a declining company and have never overcome the inertia of leaving. Heaven help IBM if those people ever figure out what they're worth on the open market. It all results in a constant, dull-throbbing-headache approach to work instead of an exciting, challenging environment where you can feel like you're making a difference.

Speaking of performance, IBM uses Personal Business Commitments (PBCs) to evaluate employees and allocate bonus money. PBCs used to be reasonable: stretch goals, but attainable, measurable, and objective. PBCs are now a farcical way to get you to do three jobs, get paid for half of one, and make sure you never get your bonus payout.

And get used to centering your life around the premiere enterprise collaboration suite of the 1980's: Lotus Notes has its tentacles around everything IBM does. You will spend hours every week working around bugs and cleaning out e-mail in boxes so you won't go over your tiny storage quota. You will be expected to do this nights and weekends.

If you are in sales (even sales engineering, like I was), you will be expected to spend four months in "Global Sales School", regardless of your past experience. It will be part of your PBCs and it will be like taking on another job in your evenings and weekends. You will learn the IBM way, since they are not the slightest bit interested in allowing your knowledge and experience to change the way they have done things for decades. Nevertheless, they will insist that this is "an investment in you" and it will of course take the place of any actual training that you need to do your job.

Even the tiniest expense at IBM is now reviewed and re-reviewed and re-re-re-reviewed by layers upon layers of beancounters. You will not be able to travel even for client visits unless the expense was approved a quarter in advance. You will have to explain to your customer why you can't come out and talk about your product in person while your competition flies out and wins the deal.

IBM is just not recruiting the top-notch talent any longer. My former boss resigned recently but not before he was getting laughed at by cold-called sales people and sales engineers to fill positions in IBM's cloud group, which is supposed to be their big investment area. You don't want to work with fifth-tier people who have nowhere else to go but IBM.

My advice to those looking to join IBM:

Run away and run away fast. Have more respect for yourself. But if you absolutely have no other choice...

Take the on-target earnings the recruiter offers and ask yourself if you can live on half of that. If you are on a 55/45% plan like I was (even as an engineer!) you will never see the other half of your paycheck (see PBCs above).

Get used to spending late nights and weekends taking on work from your colleagues as they get laid off. You will not get paid for it.

Try to convince yourself that the "we'll do anything you want, just pay us money" product approach is really a broad-based enterprise solution portfolio strategy. IBM has no idea what products it should sell because it has no idea what it wants to be. Don't fall for the notion that "cloud" or "cognitive analytics" is a strategy. Their hybrid cloud go-to-market strategy is absurd and Watson is half-marketectured-vaporware, half-rebranded-Cognos. Remember, they've gone six years since "Jeopardy" with almost nothing to show for it.

In short, IBM was a great company and who knows, it may be yet again. But unless you are an incumbent and have an existing emotional investment in trying to turn it around, you have no reason to work yourself to death for terrible wages to help them out. You can do so much better!

Advice to Management: This one is really tough because the sclerosis in IBM management is cultural. I can't advise IBM's management to be something they are not and it's not as simple as tweaking a few things. IBM's brahmin/barnacle culture invites sclerosis and rewards people who cover for each other.

"Need to focus and move fast"

Former Employee — Anonymous Employee in San Jose, CA. I worked at IBM (more than 10 years).

Pros: A very large company with many career potentials. Worldwide presence makes it a great company to work for if you have an interest to work overseas. IBM was ahead of its time in so many ways including embracing social, open source, and cloud as the core of its business. Company has very smart people working in it. Work/life balance is good.

Cons: As much as the company was ahead of its time in many areas: cloud, social, mobile, and open source, it didn't do enough to make a lasting impact in the industry. There are smart, strategic IBMers who had long identified those up-trends. But senior management hung on to status-quo, focusing on mainframes, middleware, and once high margin hardware business.

There is little to no career development. Most people are "tenured" are staying to retire. Executives are compensated based on earnings per share. This inherently steer them to cost cut in places where it matters most: high quality hires, education, and technology investment. Short-term gains and complacency lead to long-term decline of the company. Most executives are just waiting for retirement, leaving a shadow of a company that IBM once was.

Advice to Management: Challenge the status quo. The status quo is no longer viable. Change executive compensation and bonus structure on customer results. It will make them do the right thing for the clients and the company.

There are still a lot of IBMers who bleed blue. Cultivate them to be your future leaders. Focus on your good people. Don't give them a reason to join your competitors. Let go of the low-performers/those just waiting to retire and collect pension. They bring the quality down.

"Morale rapidly diminishing"

Former Employee — Sales in Nottingham, England (UK). Pros: Exposure to new products/tech. If in London then travel is not an issue and this is where it is all happening. CEO has the right gravitas and focus in the right areas. Cons: Morale is poor with constant focus on cost reduction. Loss of very good people and experience. Feeling of being a number and not a person and career lifespan nor salary not good out of London. Diminishing network of onshore expertise. Online training only. Severe distrust of management amongst employees after constant series of redundancies. Advice to Management: Stem the exodus of good people and earn their trust again.

"Political Organization"

Current Employee — Anonymous Employee.

Pros: The people one works with are generally good people. Your manager, his manager and your colleagues are usually supportive and want what's best for you (personally and professionally). IBM is a good stepping stone if you like to get your promotions and/or raises by jumping from one company to the next.

Cons: Your career is at the mercy of people who don't know anything about you or what you do. You can get a ringing endorsement from your manager and his manager but it counts for nothing unless you can convince a third party you've never worked with (or even met) that you are as qualified as your boss says you are.

IBM will pay a new hire more than a long-time employee even if they are being given the same job and responsibilities.

Advice to Management: Trust your managers when it comes to their directs. They are the ones who know who are and are not qualified. For a company that prides itself on its number of patents, our overall management is deathly afraid of thinking outside the box.

"Product Management"

Former Employee — Anonymous Employee in Littleton, MA. I worked at IBM full-time (more than 3 years).

Pros: Plenty of self-learning opportunities with access to cutting edge technologies. Technical leadership team like the fellows and distinguished engineers are helpful and willing to mentor and help with career development for the developers. Good place for junior developers to start off their career if you are with the right team.

Cons: Many of the VPs running the business have been at IBM for too long. Cannot provide product vision or leadership. Can only focus on making numbers. Lack of understanding for the product management function (is it a mini GM, outbound marketing or product designer roles?). No product managers can be good at all functions. Lack of access to new tools. IBM's internal built products like Rational are not suited for agile development.

Advice to Management: Bring in people from outside who can provide different perspectives. Product managers need to be more nimble and adapt to changing market conditions. Evaluate dated practices that no longer makes sense like forcing translations into languages where you don't even have a market presence.

"Good and Bad"

Current Employee — Senior Technical Writer in Deerfield Beach, FL. I have been working at IBM (more than 10 years). Pros: Flexible work hours work from home good pay. Cons: Remote management, you will never meet; layoff at any time; extremely long hours; make you pay for everything — even your lost badge.

"Worst Company"

Current Employee — GBS People and Project Manager in London, England (UK). I have been working at IBM full-time (more than 10 years). Pros: Benefits like sick pay, etc. Cons: No pay rises, redundancies every 6-8 months, depressed morale, lip service only paid to flexible working, annual appraisal process used to bully people to leave, colleague with 15 years continuous service put on a performance improvement plan because of 4 weeks on the bench. Advice to Management: As a manager myself I know that most of middle managers don't agree with whats going on. The aim is to get people so uncomfortable that they leave, and it's working.

"Not your Fathers IBM"

Current Employee — Program Manager in Phoenix, AZ. I have been working at IBM (more than a year). Pros: The only reason that many people stay with IBM is that you can work remotely and there aren't enough people who care to about the company to question your work. Cons: The company has turned its back on the people who have helped them stay afloat when they had troubles in the 90's. There is no reason to work for IBM unless you are in a developing company and need experience to move to a better company. Advice to Management: Just remember that you aren't immune to the daily whim of the bean counters.

"GBS"

Current Employee — Anonymous Employee. I have been working at IBM full-time (more than a year). Pros: Good salary, although no overtime salary. You may get the chance to educate yourself within interesting areas, but you have to work hard to find the time. Cons: Slow, bureaucratic, somewhat outdated, many unprofessional and unenthusiastic people. Not very good training; mostly e-learning. Strict rules; not many perks at all. Advice to Management: Find other ways to evaluate employees than just hours claimed. Create a better work culture, with more young professionals and less outdated people who do not participate in change.

"Going down in flames"

Current Employee — Anonymous Employee. Pros: Vacation plan, long- and short-term disability plan, supplied workstation, work from home. Cons: Constant fear of being let go, continual reduction of benefits, continually offshoring work to low-skilled labor, disjointed leadership. Advice to Management: Focus more on running IBM as a business long term, and less on lining your pockets. You are destroying IBM's reputation and alienating its customer base.

"Big Blue is still big. But not better."

Former Employee — Senior IT Specialist in Dallas, TX. I worked at IBM full-time (more than a year). Pros: Benefits on par with other large Fortune 500s. Training opportunities. Lots of enthusiasm from the younger employees starting out. Now Apple gadgets galore. Cons: No idea how to sell services appropriately. Constantly being challenged by competitors for the same work, resulting in lower margins, higher travel requirements and mismatched resources. Bench time is severely penalized. So forget about taking advantage of the training opportunities unless you are making all of your numbers. It feels like a ship in decline. Advice to Management: Hire experienced services sales resources. Do more to create a culture of community than schedule dozens of conference calls. Ensure that everyone is using the tools to pursue engagements the same way.

"Great People"

Former Employee — Software Client Architect in Montgomery, TX. I worked at IBM (more than a year). Pros: Learned a lot from really smart people. Cons: Nothing bad to say about IBM.

"Seen better days..."

Current Employee — Anonymous Employee. Pros: Highly qualified peers with strong work ethic and values. Cons: Upper management disregards employees and clients. Short-term financial goals drive staffing decisions that degrade customer delivery. Advice to Management: Quit routinely laying people off to offshore work while pretending that the company is growing and thriving. Be honest and open about layoffs.

"Good company"

Current Employee — Anonymous Employee in Milan (Italy). I have been working at IBM full-time (more than 10 years). Pros: Opportunity to grow and learn new things. Cons: During the last decade the company has lost many contracts and fired many employees. This is not a safe time for anyone looking for a stable position. Advice to Management: Use the experience of your employees.

"The Good the Bad and the Ugly"

Former Employee — Executive Program Manager in Sorrento, FL. I worked at IBM (more than 10 years).

Pros: Great people from all over the world and from many different companies creating a great opportunity to learn. Opportunities to work almost anywhere in the world. Still not bad healthcare and a fair 401k.

Cons: The Bad: The pay is higher at other IT companies. The Ugly: They think nothing of expecting you to work 70 hours a week, month after month, and of course there is no compensation for it. Then when you do get a vacation there is no backup so when you get back you need to step it up to 80 hours a week for a while to get caught up.

Advice to Management: IBM is all about the $ and yet the stock is anything but impressive. Perhaps creating a better environment for the employees would enable them to better help you in correcting the problem you have created by being nearsighted to the $?

"Dinosaur"

Current Employee — Sales Specialist in Hong Kong. Pros: Lots of interesting conversations to be had over a myriad of middle-of-the-road solutions pushed by a bunch of technical non-business focussed people. Cons: Poor leadership; me first culture; patronising; lack of clear strategy and wasted resources on marketing that is not picked up by key market segments.

"Security Software Sales"

Current Employee — Security Software Sales in Houston, TX.

Pros: IBM is making a deep investment in the data security portfolio. Lots of solid acquisitions (QRadar, Big Fix, Resilient Systems). Compensation for sales position is competitive. Deep penetration into the Fortune 500 with relationships at the very top make large enterprise sales possible. It is possible to reinvent your career at IBM. IBM enables and encourages this.

Cons: Channel sales are a mess. The programs are difficult to understand and even more difficult for business partners to get paid on. Most VARs in the security space don't work with IBM. This is a huge opportunity missed.

The culture is dated. Too many people who have been at IBM for way too long with dated, unproductive practices. Meetings that result in meetings so they can schedule more meetings.

"Not a good time to work at IBM"

Current Employee — Project Manager in Detroit, MI. I have been working at IBM full-time (more than 10 years).

Pros: Work at home if you support internal IBM (IBM Global Account - IGA).

Cons: No raises, no bonus, average salaries, 401k match paid at end of year, match cut from 6% to 3% for some divisions in 2016, no pension (eliminated 2008), frequent layoffs (1Q of every year), no retirement benefits, steady movement of US jobs to lower-cost countries (India, China, Brazil, Malaysia, Easter Europe), severance package cut in 2016, high utilization targets for consultants, no training budgets, most all training is on-line and must be taken on your own time — 40 hours a year.

Company has had 15 straight quarter of declining revenues and stock price is off 40%. It will be many years before things get back on the upswing and all the employee benefits lost will likely never return (unless you are at top executive level; multi-million dollar salaries, raises and bonus still abound).

Advice to Management: Spend some of the $8 billion in cash you have on the employees in the form of raises and bonus. If Ginny can have a $4.5 million dollar bonus, why can't the rest of the employees have a share.

"SAP Consultant IBM"

Current Employee — Senior SAP Consultant. Pros: Fast growth opportunities, large, global projects at prominent organizations, good salary. Cons: No social events organized by IBM, especially as a consultant being abroad 4 days a week you don´t really get to know your direct colleagues because of this which is difficult at the start of your career at IBM. Advice to Management: Do not only focus on profit, but also on the employee as a person.

"High value for early careers"

Current Employee — Senior Software Development Manager in Research Triangle Park, NC. I have been working at IBM full-time (more than 10 years).

Pros:

Good place right out of school to learn the ropes and to engage with some of the brightest minds in the industry

Opportunities and pathways can be boundless, offering unlimited potential for getting involved in an area that is of high interest to you or as an avenue for skill growth

Recent transition to new performance management system is definitely a very positive step in the right direction, though first year results are yet to be determined

Salaries are fairly competitive by geography, especially at career start

*A lot of extras that can be taken advantage of, though you will need to seek those out (discounts, education, etc)

Cons:

You're merely a number. In such a large corporation you are surely bound to get lost in the hustle/bustle. This can have impact across a number of areas, especially compensation. I tend to steer folks away from anything 'services'-related specifically because of this.

If you don't know, it's very easy to be in the wrong place at the wrong time, and that can have dire consequences.

A lot of teams are very distributed, which can result in isolation. If preference is work-at-home, that can work in your favor, but if you enjoy the collaborative aspects, then make sure before signing on the distribution of the team make-up. You could end deserted in a cube.

While mentioned also as a pro, unsure as to what the new performance management system will bring, especially as it relates to final end of year reviews.

Benefits are not nearly as competitive as other companies in the immediate area.

Advice to Management: Not so much management advice, but more so to those interested in IBM. It's somewhat difficult to provide a very clear review of IBM due to its size. There are too many different business units and organizations where one can land that will have drastic impacts on what could be conveyed here. I've tried to be org-neutral in this review. At the time of writing, the hottest places to be are in anything Watson and in IBM Cloud by way of Bluemix. Very cutting edge work going on in those places, and the opportunity for broader industry impact are absolutely huge. Though, with that, I would venture to say that the work/life balance for someone in those areas (or any DevOps as well) would suffer a bit compared to others.

"Great ideas; but long-term IBMers cannot execute change"

Current Employee — Anonymous Employee. I have been working at IBM full-time (more than 3 years).

Pros: Huge choice of jobs and locations, easy to hide in mid-performance zombie land if you're so inclined. You'll see their marketing on the TV at the Masters.

Cons: Getting promotions and raises is all about who you know. All senior management positions go to long-term IBMers with micro-management styles honed in the 1970s. Newly acquired companies are forced to use existing IBM systems that 100% of the time don't work for the newly-acquired businesses. You really are a number; layoffs are regular and dehumanizing. Senior management does not care about people at all.

Advice to Management: Get rid of the old guard; listen to the new hires that come in with acquisitions. In almost all cases they will know more about their businesses than senior IBMers who are brought in to "fix" the business. Figure out how to give autonomy to the line managers so they have a shot at creating some decent engagement from their teams.

"IBM's going down hill fast, morale wise and career wise."

Current Employee — Advisory Software Engineer in Kirkland, WA.

Pros: Salary and benefits. Being able to work from home is nice.

Cons: The company lacks leadership, guidance under the current CEO. It's a fend for yourself type environment instead of a team building, help the last man standing type place. Managers only look out for themselves and don't create a cohesive team environment.

Advice to Management: Managers need to start building a team foundation where everyone thrives with new skills and cross training. All the reorganizations of certain groups truly drive a wedge between team growth. The reorgs create uncertainty. People are scared for their jobs with all the layoffs happening. Bad morale for the last 10 years has created a horrible work environment.

"Not as advertised — Client Innovation Centre"

Current Employee — Anonymous Employee in Leicester, England (UK). I have been working at IBM (less than a year).

Pros:

Good group of people to work with.

Fair base salary.

Nice Office.

Interview process was good

Cons:

People leave every week which creates an environment of uncertainty.

Expected to work without remuneration, but this is still charged to clients.

Promise of flexible working/ working from home but never delivered.

No pension or benefits.

Culture of presenteeism; people who want to maintain a decent work/life balance are looked at as unambitious.

When we joined we were explicitly told that the work would be based in Leicester; now they expect you to travel to the other end of the country at short notice without any consideration for your home life.

Advice to Management:

Think more about long term: Investing in your employees will make them more likely to stay.

Stop sending people on the first project that comes up, some projects will not fit peoples circumstances. And some projects are simply not suitable for people in Leicester to work on.

Provide a pension before the government one comes in. IBM is a huge company so could easily offer some sort of pension for us.

"Decaying from within..."

Current Employee — Anonymous Employee. I have been working at IBM (more than 5 years). Pros: Easy to work remotely, lots of coworkers, room to move. Cons: Old model, poor management, archaic structures

"Another Quarterly Earnings Miss = Another Round of RAs"

Current Employee — Systems Administrator. I have been working at IBM full-time (more than 10 years). Pros: Some of the best people to work with in the business. Ability to work with new technology on the cutting edge. Cons: Constant RAs are no longer trimming the fat but cutting deep into the muscle at IBM. Lack of any formal training and the constant fear of layoffs as a means to try and make numbers to appease investors have employees on edge. Advice to Management: Spend money on developing great new products and less time on new ways to trim costs which impacts employee morale.

"Program/Project Manager&quot

; Current Employee — Program/Project Manager in Canonsburg, PA. I have been working at IBM full-time (more than 10 years).

Pros:

Working from home

Work life balance

Benefits

Cons:

Poor morale

Constant threat of layoff in the United States

Compressed pay for long tenured employees

Little opportunity for promotion

Advice to Management: This is advice to corporate America: If you continue to offshore all of the jobs overseas, there will be nothing left in the US. Eventually, the offshore resources will demand higher compensation and it will not be worthwhile to offshore the work any longer. Where there be a talent pool left her in the US?

"Upper management is out of touch"

Current Employee — Development Engineer in Poughkeepsie, NY. I have been working at IBM full-time (less than a year). Pros: Work/life balance is nice. I travel a lot in my free time and the hours are flexible to accommodate that. Great teammates. The job is fun. Cons: Upper management doesn't have a clue. Keep laying off older experienced employees but don't hire anyone to replace them. They also slashed bonuses this year while rewarding the CEO/board. Advice to Management: Listen to your employees, not just the yes men. Morale is crumbling and yet you keep cutting benefits and devaluing the work your employees do. Remember who makes your products and is the reason IBM is great, and act like it. We are not just a line on a spreadsheet.

"Business analysis"

Current Employee — Business Analyst Entry Level in Cumberland, MD. Pros: Very friendly hiring process. Everybody is trying to answer your questions to the fullest ability. I was a mechanical engineering major and I never thought I'd be at a IT place as an engineer but It will be good experience. Cons: In rocket center WV the starting salary was kind low at 45 thousand a year. A lot of competition with ivy league schools. Advice to Management: Just keep doing everything you were doing and stay being friendly and helpful. The hiring process takes a long time and it's nice to have someone be there to ask all the questions and get good answers.

"Good Flexibility little Job Security"

Former Employee — Anonymous Employee. Pros: Working from home and flexible working. Exposure to latest tech and interesting projects. Cons: Constant redundancy programmes, disconnect between employees and managers. Advice to Management: Improve morale and invest in your staff

If you hire good people and treat them well, they will try to do a good job.
They will stimulate one another by their vigor and example.
They will set a fast pace for themselves.
Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will
share in its sucess, they will contribute in a major way.
The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders.
—Thomas J. Watson, Jr., from A
Business and Its Beliefs: The Ideas That Helped Build IBM.

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